INTERNATIONAL CIVIL AIR
TRANSPORT-TRANSITION
FOLLOWING WW II
L. Welch Pogue
Massachusetts Institute of Technology
Flight Transportation Laboratory
June 1979
FTL (-ep.v+
ft(7I%0
Massachusetts Institute of Technology
Flight Transportation Laboratory
Report FTL-R79-6
INTERNTIONAL CIVIL AIR TPANSPORT--TPANSITION FOLITAING WW II
L. Welch Pogue
June 1979
PREFACE
This report is the text of a seminar given by
Mr. Pogue for the course "Air Transportation -- Economics,
Management and Planning." The course was presented by
MIT's Flight Transportation Laboratory incooperation with
the Technical Assistance Bureau of the International Civil
Aviation Organization. The course ispart of the Advanced
Study Program inAir Transportation, given under the auspices
of the Center for Advanced Engineering Study.
(ii)
Table of Contents
Page
I.
II.
III.
Introduction
1
Motivation Behind the Invitation of the United States
to the 1944 Chicago International Civil Aviation
Conference
2
Chicago 1944 International Civil Aviation Conference
5
A.
Objectives of the Chicago Conference
6
B. Unsuccessful Proposals Concerning the
Establishment of Air Routes and Services
7
C.
The International Air Transit Agreement
8
D.
The International Air Transport Agreement
9
E.
Chairman Berle's Dismissal as Assistant
Secretary of State
11
Air Routes and Rights to be Negotiated in
Bilateral Air Transport Agreements
12
F.
IV.
V.
VI.
VII.
The International Civil Aviation Organization (ICAD);
and the Provisional Predecessor Thereof (PICAO)
14
International Air Transportation Association (IATA)
15
The United States--United Kingdcn Bilateral Air
Transport Agreement (1946) -- The Bermuda Agreement
19
Epilogue
25
Attachments
June 15,
1979
INTERNATIONAL CIVIL AIR TRANSPORT--TRANSITION FOLLOWING WW II
Lecture Delivered on June 15, '1979 in
Cambridge, Massachusetts, in the Course
Given by Massachusetts Institute of Technology in Cooperation with the International Civil Aviation Organization on "Air
Transportation--Economics, Management, and
Planning"
By
L. Welch Pogue*
I.
INTRODUCTION
International air transport, like many 20th Century
marvels which are taken so much for granted today, broke out
from its cocoon, so to speak, shortly after the end of World
War II (WW II), took wing, and soared. Theretofore, its growth
had been retarded by fear of flying, by restrictive policies
in granting civil air rights based upon narrow views about the
sovereignty of nations over their air space and by the inevitable "bugs" that plague the early phases of most innovative
*/
Mr. Pogue's background: A.B., University of Nebraska
1924; LL.B. and J.D., University of Michigan Law School
1926; S.J.D. Harvard Law School 1927; Associate in law
firm of Ropes & Gray, Boston, Massachusetts, 1927 August 1938, practicing law in Boston, Paris, France,
and New York City; Assistant General Counsel newly
created Civil Aeronautics Authority, September 1938 Spring 1939; General Counsel 1939 - 1941 (Five Member
authority name changed in 1940 to Civil Aeronautics Board);
Chairman, that Board 1942 - June 1946; private practice
of law from that time, Washington, D.C. and Washington
Managing Partner through 1978 of Jones, Day, Reavis &
Pogue, Cleveland, Ohio, Washington, D.C. and Los Angeles
California.
- 2 -
technologies.l/ This paper will undertake to trace the high
points in that post-WW II metamorphosis.
II.
MOTIVATION BEHIND THE INVITATION OF THE UNITED STATES TO
THE 1944 CHICAGO INTERNATIONAL CIVIL AVIATION CONFERENCE
A striking feature of the 20th Century has been the
explosion of technology. In this respect, this Century gets
the highest marks in all recorded time. This vast field
includes the 1903 invention of powered flight. For the first
time man and his cargo could sail through the air at incredible
speeds. The dream of countless generations had come true-in our Century.
In the airplane's "slipstream", so to speak, came turbulent
impacts upon the world's economics, culture, politics, and military concepts. National power relationships were torn apart
and reformed. Age-old concepts, such as the doctrine that there
would always emerge some strong nation or alliance of nations
exercising the regional "balance of power," became obsolete.
Aviation had "reduced the world to manageable proportions" so
that two or three nations could dominate the world's big stage.
Although military aviation had a dramatic place in the
tense World War I struggle, it had only a minor impact upon
the outcome of that war as a whole. In World War II, however,
the technology had advanced so much as to make air power a major
factor.
"Air power", as used in this paper, includes both military and civil aviation in all of their forms and uses. This
advance of air power brought on the acceptance of civil air
transport as a factor of great significance upon civilization.
As aviation had come to perform increasingly important roles in
1/
The first diplomatic conference to consider international
flight regulation met in Paris, France, May 10, 1910.
Although it adjourned June 29, 1910 without reaching any
agreement, the early French proposal that "air navigation
is free" was largely overcome by British and German positions which favored the adoption of the doctrine that each
nation possesses "sovereignty of the air space" above its
territory. "The International Air Navigation Conference,
Paris, 1910", John Cobb Cooper, 19 Journal of Air Law and
Commerce 127 (Spring 1952).
The subsequent Paris Convention of 1919, the Havana Convention of 1928, and the
Chicago Convention on International Civil Aviation of 1944,
stated, in positive terms, that each state possesses sovereignty of the air space over its territory.
-
3 -
all phases of war-time life (including accelerated industrial
production), the imagination of men's minds leaped to the view
that in the post-war era, the airplane would "shrink" the world
so much, both militarily and in a civil sense, as to make every
civilization, and its trade and commerce, available to every
other civilization on earth. Suddenly, civil aviation had
become vitally important.
In the civilian use of the international air transport,
however, some manmade rules needed development to permit it to
operate. Therefore, unlike the free use of the high seas for
worldwide operations by ships, concepts of sovereignty of nations
over their airspace prevented the use of the "ocean of air,"
except by agreement of the nation whose air space was used.
As the meteoric advancements during WW II in the capacity
of the United States to manufacture large aircraft (including
both transport aircraft and big bombers) became known throughout
the world, fear of the post-war superiority of the private,
international airline operators of the United States sprang up
in the minds of leaders in foreign countries.2/ These leaders,
for the most part, viewed future air transport operations by
their various countries as glamorous, a badge of prestige, and
a way to gain extraterritorial exhibition of their country's
flag and status. Furthermore, they had only the history of
operations of ocean shipping under the "Freedom of the Seas"
doctrine as precedent on which to base their predictions concerning the development of international civil air transport.
That doctrine had been launched in 1608, by the famous lawyer
and statesman, Hugo Grotius (1583-1645), who had been retained
by the Dutch East India Company to establish the right of
2/
Somewhere in the course of WW II, Mr. Harry Hopkins, representing President Franklin D. Roosevelt, reached an understanding with Britain's Prime Minister Winston Churchill
that England would concentrate her aircraft manufacturing
efforts on fighters (particularly Spitfires) and the U.S.
would concentrate on large bombers (particularly daytime
bombers) --
the British had been using night-time bombers
(with lesser target accuracy than daytime bombing would
permit) in order to reduce the hazard from anti-aircraft
fire-power. The result of several years of this divisionof-labor was --
as indicated in the text --
the U.S. was
ready with its know-how for the operaticns of large aircraft (transatlantic transports had to be large to have
the necessary range) --
England was not as ready.
- 4 -
Dutch traders to sail through the South Atlantic and the Indian
Ocean (claimed to be owned by Portugal) on their way to trade
in the Dutch East Indies. In a brilliant brief, he laid the
basis for the doctrine. Eager Dutch -traders and commercial
interests placed it into practice. Later the English endorsed
the Dutch-born Freedom of the Seas doctrine and policed it
vigorously with their powerful Navy as a method of assuring
British commercial interests of the right of access to commerce and trade all over the world.
As a result of this doctrine, the nation possessing the
strongest and most amply equipped commercial shipping fleet
could, and in some well-known cases did, monopolize the
richest markets of the world. The quantum of service was
elastic and access to markets was practically unlimited.
Prior to World War II, it had been common practice (with
limited exceptions)- for the United States privately owned air
carrier to make such bargains as it could on its own for air
routes and rights in foreign countries. On October 15, 1943,
a new United States policy was announced. On that date, the
Department of State and Civil Aeronautics Board (CAB) issued
a joint statement. It was to the effect that thenceforward air
routes and rights would generally be negotiated by the Department
of State in close collaboration with the CAB. Thus, the curtain
for action by and between governments on the international stage
was rung up in anticipation of the ending of the war.
Soon thereafter, the industrial might of the United States
began to tilt the scales in the direction of the defeat of
Germany and Japan. As this result dawned on the minds of the
leaders of the war-torn countries, they began to worry about
the United States airlines running operations offering massive
services all over the post-war world with their big transport
airplanes and converted bombers. This could be done long before
such devastated nations would be able to set their economic
houses in order and turn to the matter of mounting an air transport operation of their own. This became a matter of worldwide
deep concern.
Thus, to clear the air in this worrisome area of apprehension, the Civil Aeronautics Board (CAB), with the approval of
the Department of State, held a press conference and made public
a map of its intended post-war international air routes. A copy
of that map appears at the end of this paper as Attachment 1.
In the case of every important route, it constituted a reasonably
direct route out from and back to the home base in the United
States. There were no proposed wandering "tramp operations"
criss-crossing the oceans of air of the world (as had sometimes
been the case with sea shipping) and the United States evinced
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no intention to take advantage of the distress of other countries.
The deep concern in the world about the imagined overreaching
intentions of the United States to "monopolize" all the important air markets immediately disappeared, leaving only a vague
fear that the United States operators would somehow, even on the
limited direct routings, with low rates and high capacity levels,
overwhelm the efforts of the operators of other countries.
III. CHICAGO 1944.INTERNATIONAL CIVIL AVIATION
CONFERENCE
It was at this point (late summer of 1944) that the idea
was conceived of calling a conference of nations of the world
to be held in Chicago, Illinois, beginning November 1, 1944.
The United States invitation was issued to 55 nations, then
constituting all of the principal world states except enemy
nations. Fifty-one nations sent delegations (over 1,000 dele"There is a tide in the
gates, consultants, and advisors).
affairs of men" is a well-known observation (which Brutus made
to Cassius on the field of battle) which applied here. There
was but a tiny period in history, relatively speaking, when so
many elements were favorable for the open consideration and
debate of this vitally important subject. That period began
when the conviction became current that the German/Japan Axis
would be defeated and it ended with the actual surrender of
Japan (following the disintegration of Hitler's Germany) in
1945. Earlier, the allied world was exerting every muscle
to win -- there was no adequate time or energy left for postwar planning; and later, the renewing contentions between
victorious allies struggling to recover their status in the
world would have immensely complicated the acceptance of even
reasonable proposals. But by November 1, 1944, the opening day
of the Chicago Conference, the apprehension, which I have mentioned, had been quieted, WW II was closing down, and men's
minds were ready for a great lunge forward in civil air
transport services. Tomorrow would be too late. So thought
Assistant Secretary of State, Adolph A. Berle Jr.; and he was
right.3/
3/
It is interesting to note that for the first time in
modern times, the official languages of the Conference
were to be limited to English and Pussian (not French),
but Russian was dropped when the Russian delegation, on
their way to the Conference, mysteriously turned around
at Fairbanks, Alaska, and returned to Russia, never to
be heard from again during the Conference. (The Union of
Soviet Socialist Republics became a member of the International Civil
Aviation Organization on November 14, 1970.)
- 6 -
A. Objectives of the Chicago Conference
The invitation to the Conference was ambitious. It
divided its objectives into three parts:
(1) The establishment of provisional world air route arrangements by general
agreement; (2) The establishment of an Interim Council to act
as a clearinghouse and advisory agency during the transitional
period; and (3) Agreement upon the principles to be followed in
setting up a permanent international aeronautical body, and a
multi-lateral aviation convention dealing with the fields of
air transport, air navigation, and technical subjects.4/
It is instructive to bear in mind that when invitations to
international conferences are formulated and issued, it is generally the case that the delegation to represent the host
country has not yet been appointed. Such was the case here.
The U.S. Delegation ultimately formed included strong-minded
personalities.5/
The views and philosophies of this Delegation and its
consultants and advisors importantly influenced the positions
taken by the United States, as will be noted.
4/
Invitation of the United States of America to the Conference, Department of State Publication 2282, page 2,
Conference Series 64 (1945).
5/
The United States Delegation consisted of Assistant
Secretary of State Adolph A. Berle, Jr., as Chairman (he
also was elected President of the Conference); Senator
Josiah W. Bailey of North Carolina, Chairman of the
powerful Committee on Commerce of the Senate; Senator
Owen Brewster, of Maine, a Member of that Committee and
an aggressive leader in the field of international aviation;
Alfred L. Bulwinkle, of North Carolina, an influential
Member of the House Interstate and Foreign Commerce Committee; William A. M. Burden, Assistant Secretary of Commerce and Air; Rear Admiral Richard E. Byrd, U.S.N.,
Retired; Fiorello H. LaGuardia, Mayor of New York City
and Chairman, United States Section, Permanent Joint
Board on Defense (Canada-United States); L. Welch Pogue,
Chairman of the Civil Aeronautics Board; Edward P. Warner,
Vice Chairman, Civil Aeronautics Board; and Charles A.
Wolverton, Member of the House Interstate and Foreign
Commerce Committee. Among the Consultants were:
Artemus L. Gates, Assistant Secretary of the Navy for Air;
J. C. Hunsaker, the great Chairman of the National Advisory
Committee for Aeronautics; and Robert A. Lovett, the
dynamic Assistant Secretary of War for Air (the Department
of the Air Force had not yet been created).
- 7
The headquarters of the older, more limited efforts -to
regulate international air services (principally in the area
of safety) had theretofore been in Paris, France. In view of
the unquestioned leadership in civil air transport services of
the U.S. operators, it became almost an obsession on the part of
the U.S. Delegation to remove the headquarters for international
civil aviation from Paris to the New World. This was accomplished but with considerable reluctance on the part of European
nations, particularly France. Canada and Cuba vied for the honor
of being the locus of the new world organization. Ultimately,
Montreal, Canada won and became the new headquarters.6/
B.
Unsuccessful Proposals Concerning the
Establishment.of Air Routes and Services
Very early in the Conference, it became clear that
England and her many supporters (including, of course, all
of the Commonwealth nations, then still in full flower) leaned
heavily toward restrictionism --
i.e., government dictation in
advance of specific air routes, rates and fares, and conditions
of.service; whereas the U.S. leaned heavily the other way -i.e., toward freedom of action in the structuring of future
international civil airline development. This was a division
destined to continue for some time.
Australia with the strong support of New Zealand and the
reluctant acquiescence of the United Kingdom (whose delegation
was chaired by the dominant Lord Swinton, a close friend of
Winston Churchill) proposed a one worldwide service to be
owned by governments and to be operated by nationals from the
nation-owners. This idea was sternly opposed by the United
States and was soon tabled. It gained no further active status
during the Conference. The idea persisted in one form or
another in the halls of the Conference until its dedicated
sponsors-, one by one, sadly gave up the lost cause.
The United Kingdom, joined by Canada, espoused an international Civil Aeronautics Board. It would have had absolute
power over (1) routes, (2) who operated them, (3) rates and
fares, and (4) various competitive practices.
6/
From the perspective of world power politics, this was
acceptable.
Canada is a relatively small nation in
population, it is a member of the British Commonwealth
of Nations (thus pleasing to the valiant British ally),
and it is a country whose prospect was that of stability
and peace.
- 8 -
The United States Delegation was adamantly opposed. The
intra-United States Delegation reasoning was that the foreign
elements (particularly the European nations) would consolidate
their interests in such an international regulatory commission
and would, for the most part, be against those of the U.S. The
British concept, though pursued with vigor, soon was, in effect,
tabled becaused of the intense opposition of the United States.
The concern of those favoring restrictionism and, therefore, favoring an international CAB was based upon the fear that
the strong United States private carriers would flood the markets
with capacity and would offer very low rates and fares, thus
squeezing out competing foreign air carriers.
C.
The International Air Transit Agreement
An outstandingly successful proposal for action on a multilateral basis was that the nations of the world should, by
treaty, agree to permit peaceful civil air transit through their
air space. This proposal was made by the United States in the
form of the International Air Transit Agreement.
Section 1 of that Agreement provides that "Each Contracting
State grants the following freedoms of the air in respect of
scheduled air services:
~
"(1)
The privilege to fly across its terri-
tory without landing;
"(2) The privilege to land for non-traffic
purposes."
This was signed, ratified by 92 nations and is in effect today.
It is a great boon to world civil air services. Theretofore,
the right to fly through the airspace of any nation with civil
aircraft had to be bargained for. Before you can discharge or
take on passengers or cargo at a foreign point, you must first
get there. In most cases, intervening countries, many of which
may be adequately served by other services, must be overflown.
The question of the right to get there was the first problem to
be met in the then international air riddle.7/ The International
7/
"Common sense In Aviation Thinking," by L. Welch Pogue,
Chairman, Civil Aeronautics Board, delivered before the
Greater Twin Cities Chapter, Nation Aeronautics Association, at Minneapolis-St. Paul, Minnesota, April 9, 1943.
MMMI
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9 -
Air Transit Agreement addressed itself to that problem. The
opening of the ocean of air to peaceful international airline
transit use constituted a milestone of progress. That result
alone would have justified the holding of the Chicago Conference.
D.
The International Air Transport Agreement
Another proposal for action on a multilateral basis was
that the nations of the world should, by treaty, agree to permit
the establishment of air routes and services on a reasonably
direct routing. This proposal was made by the United States in
the form of the International Air Transport Agreement (sometimes
called the "Five Freedoms Agreement"). Article I, Section -1provided (in part) that:
"Each contracting State grants the
other contracting States the following
freedoms of the air in respect of scheduled international air services:
(1) The privilege to fly across its
territory without landing;
(2) The privilege to land for nontraffic purposes;
(3) The privilege to put down passengers, mail and cargo taken
on in the territory of the State
whose nationality the aircraft
possesses;
(4) The privilege to take on passengers, mail and cargo destined
for the territory of the State
whose nationality the aircraft
possesses;
(5) The privilege to take on pas--.
sengers, mail and cargo destined
for the territory of any other
contracting State and theprivilege to put down passengers, mail and cargo coming from
any such territory.
"With respect to the privileges specified under paragraphs (3), (4), and (5) of
M11111
-
10
-
this section, the undertaking of each contracting State relates only to through
services -on a route constituting a reasonably direct line out from and back to the
homeland of the State whose nationality
the aircraft possesses."
The Air Transport Agreement was signed at the Conference
(December 7, 1946) by 20 nations; and by 8 more later -- a total
of 28.8/
Now I must pause for a more general discussion of this
important agreement. It manifested the "open opportunity" position of the United States government at the time the Conference
was called. The United States was prepared to issue a general
invitation to the carriers of all governments to establish routes
to the United States if other governments would give similar
rights to our carriers.9/ Thus United States air transport would
be able immediately to establish and to begin development of the
routes already laid out by the Civil Aeronautics Board. United
States carriers would not be held up by foreign governments'
8/
The 20 nations signing under the date of December 7, 1944
were: Afghanistan, Bolivia, China, Dominican Republic,
Ecuador, Haiti, Honduras, Lebanon, Liberia, Mexico,
Netherlands, Nicaragua, Peru, Sweden, Turkey, United
States, Uruguay, Venezuela, Danish Minister, Thai Minister.
The nations signing later were: Costa Rica (3/10/45),
Cuba (4/20/45), El Salvador (5/9/45), Ethiopia (3/22/45),
Guatemala (1/30/45), Iceland (4/4/45), Luxembourg (7/9/45),
Norway (1/30/45), Paraguay (7/27/45), Switzerland (7/6/45),
Syria (7/6/45), Union of South Africa (6/4/45). Spain
also signed but reserved 5th Freedom Rights.
It should be noted that except for the United States, no
major State with a potentially significant traffic contribution exposed that traffic to the service permitted
by this Air Transport Agreement.
9/
The current United States policy is remarkably similar to
the one being advocated thirty years ago. The United States
is attempting to convert the present restricted international air transport environment to a-free-market with--unlimited routes and rates, and capacity regulated only by
the carrier's home government.
-
11
-
desire to delay operations until their carriers were prepared.
As the Conference proceeded, this position was sharply challenged not only by foreign governments fearing United States
predominance but by members of the United States delegation who
argued that, for a short term advantage, the United States was
being unduly generous in giving away the potentially rich
United States air transport market for routes of limited Vatue.
To them a process of bilateral bargaining seemed better.
The advocates of the latter position won the day.
The Agreement was never ratified by the United States.
The Department of State sent the Agreement to the Senate for such
action; but it was recalled before the Senate had an opportunity
to act upon it.
It never came into force. 10/
The conflicts which surrounded this Agreement are reflected
in dramatic events which were going on "behind the scenes."
They, in effect, scuttled any multilateral, international route
authorization even though it was a stated objective of the
invitation to the Chicago Conference. We should turn now to that
dramatic bit of history.
E.
Chairman Berle's Dismissal as Assistant
Secretary of State
At this time, the Conference was drawing to a close. It
was about December 4, 1944 that I received an urgent message
from Chairman Berle to come at once to his room in the Chicago
Stevens Hotel (where the Conference was being held).
Upon
arriving there, I saw that Chairman Berle's countenance was
ashen but he was in complete control of himself. Berle said:
"Mr. Pogue, I have just received a telegram
from President Roosevelt stating that he
10/
On July 25, 1946, the United States gave the required one
year's notice of withdrawal from this Agreement. Department of State Bulletin of August 4, 1946, p. 236.
This recall was taken while the treaty approving the
Convention on International Civil Aviation was pending.
There were many who thought that that treaty would have
been in much jeopardy if the Administration had continued
to support the International Air Transport Agreement which
was strongly opposed by some leading Senators.
-
12
-
has accepted my resignation as Assistant
Secretary of State. That is particularly
interesting because I have never submitted
any resignation, nor has it been suggested
that I do so. However, I have not been
removed as Chairman of the United States
Delegation nor as President of the Conference, and I intend to close the Conference without mentioning this development if you will support me in doing so."
I assured Berle that I would support him; and Adolph Berle
carried on as Chairman of the United States Delegation and as
President of the Conference until he closed it. This thoroughly
able, responsible and patriotic public servant continued to preside with a firm hand and with an outflow of inspiring oratory
as to the significance of this great Conference and as to its
achievements. It demonstrated an indomitable spirit of courage
and a willingness to subordinate one's personal ego to a larger
cause.
There was further discussion between Berle and me of the
reasons for this extraordinary timing of action concerning him
coming 3 days before the scheduled close of the Conference. It
was clear, Berle stated, that certain airlines were violently
opposed to any multilateral route resolution. When Berle had
gone along with the Air Transport Agreement, he had acted in a
manner contrary to the stated wishes of some members of the
Delegation. It seemed clear that someone in a position of power
had requested his immediate dismissal as Assistant Secretary of
State. This was most humiliating while the Conference was still
in session. The President yielded, although theretofore he had
been very supportive of Berle and of his ideas (President
Roosevelt soon appointed Adolph A. Berle as Ambassador to
Brazil
--
F.
seemingly a consolation action).
Air Routes and Rights to be Negotiated in Bilateral
Air Transport Agreements
Thus, it became clear from a very high level that it was
intended that all United States approaches to the establishment
of international air routes through multilateral action was
dead for the immediate future. Even the ultimate fate of the
International Air Transport Agreement was easily predictable,
although Berle did not withdraw it. Several years later an attempt
to revive the multilateral approach was the subject of a conference
in Geneva, Switzerland and still later in Montreal, Canada. Both
efforts failed.
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13
As if it had been known all along that the Chicago Conference
would not provide for multilaterally authorized worldwide air
routes, there had been-developed in the Conference a "Form of
Standard Agreement for Provisional Air Routes"ll/ sometimes referred
to as the "Chicago Standard Form." Although orIginally drafted in
multilateral language, it was used by the United States and other
countries as a basis for bilateral air transport agreements until
modified by the U.S./U.K. Bermuda Agreement, referred to below.
This Chicago Standard Form imposed no restrictions on capacity,
rates or fares, or traffic generated and carried between third
countries.12/
ll/
"Bilateral Air Transport Agreements Concluded by the United
States," by Joe D. Walstrom, Department of State Bulletin,
December 22, 1946.
12/
Although it was clear at once that the bellwether nation to
lead off in the new order of bilateralism was the British,
.they were not ready for operation and would not negotiate at
that time. Ten small nations did, however, sign bilateral
agreements.
Thus, although no specific action was taken on the program
of endorsing the proposal to secure air rights commercially
through bilateral agreements, it was the general impression
of the Delegates at the termination of the Conference that
those rights were to be obtained thereafter in that manner.
The provisions of the Chicago Standard Form were used in
most of these early bilateral air transport agreements.
It included clauses providing for the intergovernmental
exchange of air rights to be exercised by designated airlines of the respective countries; equality of treatment
and non-discriminatory practices with respect to airport
charges, the imposition of customs duties and inspection
fees, and the exemption from such duties and charges in
certain cases; mutual recognition of airworthiness certificates and personnel licenses; compliance with laws and
regulations pertaining to entry, clearance, immigration,
passports, customs, and quarantine; criteria as to ownership and control of each country's air services; registration of pertinent agreements with PICAO; termination of
agreement on one year's notice; and procedure for amending
the route annex to the agreement.
-
IV.
14
-
The International Civil Aviation Organization (ICAO); and
the Provisional Predecessor Thereof (PICAO)
The multilateral approach to international civil air services
was achieved in the field of safety. Here, the Chicago Conference
was a great success.
The task of preparing a Convention on International Civil
Aviation was undertaken by Subcommittee No. 2 of the Conference,
of which I was'Chairman. The Organization which we established
deals primarily with matters of safety--and it deals with them
extensively.13/ In order to avoid the charge that nations
(particularly-the United States) were unconstitutionally delegating their sovereign power to an international organization,
it was worked out so that ICAO does not, on its own authority,
make safety rules and standards; it merely recommends them and
all nations are to use their best efforts to place them in
effect; and if they cannot do so, they must so report to ICAO.
This has worked well.
The establishment of an Interim Council to act as a clearinghouse and advisory agency during the transitional period--was, in
effect, provided through the Provisional International Civil
Aviation Organization.(called PICAO), which served for several
years as the predecessor of ICAO. When the assembly of PICAO met
in May 1947, following the coming into force of ICAO in April,
PICAO was, in effect, dissolved inasmuch as it was intended to
be Provisional only until ICAO became effective.
13/
The Convention on International Civil Aviation was ratified
by the Senate July 25, 1946; it was ratified by President
Truman August 6, 1946; and it came into force April 4, 1947.
61 Stat. 1180 (1947).
The almost instant and continuing success of PICAO and,
beginning in 1947, of ICAO was due, in no small part, to
the outstanding leadership and ability of -Edward P. Warner(1894-1958). He resigned from the CAB -(of which he was
Vice Chairman) to become President from the outset in 1945
of the Council, first'of PICAO and then, in 1947, of ICAO.
He remained as President until 1957. In addition to being
an able aeronautical engineer he received many honors and
awards in other fields. He was a genius, with superior
talents for leadership, for administration, for coping with
international political issues, for integrity, and for being
a truly great human being. He seemed to have been born for
this very assignment.
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15
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In summary, the Chicago Conference was a great success,
although there were disappointed idealists who dubbed it a
"failure" because it did not settle all large issues. Those who
took that negative view could hardly have given proper weight to
the incredibily restrictive barriers placed in the way of international air transport in the 20-year period before Chicago. In
any case, the great achievements of the Chicago Conference were:
(1) The International Air Transit Agreement took off successfully
for a CAVU (ceiling and visibility unlimited) flight to success;
(2) ICAO and its predecessor, PICAO, were firmly and successfully
catapulted into international responsibility; and this made it
possible (a) to hold intact (to the extent deemed feasible) the
worldwide airways and communications facilities which had been
established during the war; (b) through the ICAO machinery to
provide for the development of worldwide cooperat-in -on aircraft,
airway, and air traffic control problems; (c) to arrange for the
reciprocal recognition of aircraft and aircrews certification
among member states; and (d) to treat with the entire range of
technical and operating problems of international civil operation
as a result of the flexibility given to ICAO. These were remarkable achievements, consummated at the right moment in time. In
addition, the headquarters of the international civil aviation
governmental cooperation was established in Montreal, Canada;
and numerous impractical fringe concepts which almost certainly
would have deterred international civil aviation's progress for
many years were eliminated at Chicago.
V.
International Air Transport Association (IATA)
We shall now turn to the International Air Transport
Association (IATA) and the reasons for its organization. During
the wide-ranging debates at the Chicago Conference, both in formal
sessions and at lunches, dinners, and in diverse other talkingplaces, it had become clear that the United States post-WW II air
operators were apt to be the bellweathers in the international
civil aviation field, thus setting the pace in equipment, rates,
and fares, and other conditions of service. The need felt by
the British, as well as other European nations (not including
Ireland, Sweden, and the Netherlands) for protection against
United States predominance which had manifested itself throughout the.Conference caused them to seek means by which UnitedStates air carriers could be checked, without constant exercise
by them of unilateral power to regulate rates and service of
United States carriers. The situation from their standpoint
was made worse by the fact that even the United States government had no legal power to regulate rates and services of its
own international carriers.
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16
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It was but natural, inasmuch as the British international
airline was wholly owned by the government, that the thoughts
of the British would turn to having an association of operators
control fares and conditions of service as an alternative to
wholly unilateral regulations of the United States carriers. It
is highly probable that this British concern is the origin of
the new efforts to form what came to be called IATA.
There were also good practical reasons for creating the
organization and vesting it with power to agree on rates and
service. Since each government retained the power to accept
or reject rates and capacity operated into its territory, some
type of international machinery was necessary to iron out
differences between governments on these issues. Otherwise,
operations involving a large number of countries would be
faced with an impossible position. No one wanted governments
to become involved in these detailed determinations and an
association of operators acting with approval of governments
was regarded as entirely appropriate for this purpose.
One or two very informal meetings between invited representative operators were held in Chicago (while the Conference continued) to discuss the possibility of organizing the international
operators. After the adjournment of the Conference on December 7,
1944, a later meeting attended by many more representatives of the
future international operators was held in Washington, D.C., under
the auspices of the Air Transport Association whose acting president was Stuart G. Tipton. But it was not until April 1945 in
Havana, Cuba that a still larger meeting of such representatives
was held and an organizational structure was adopted.14/ In any
case, this was in good time because a sizeable period of "lead
14/
It is non-governmental and is formed under a special Act of
the Canadian Parliament, given Royal assent in December
(Facts About IATA,
1945. Its headquarters are in Montreal.
International Air Transport Association, p.2) Its predecessor was organized at The Hague in 1919.
Additional light upon the origins of the new IA'TK is given
by John C. Leslie:
"The Chicago Conference, of course, was
at the government level and the senior delegates
(Footnote 14/ continued on page 17)
NINNIN11h.
-
17
-
(Footnote 14/ continued from page 16)
were government officials. However, many delegations included airline advisers. This meant
that a number of pre-war foreign airline executives, familiar with the old IATA, were in Chicago
attached to national delegations. With the consent of their respective delegations, they formed
a drafting Committee 1/ to draw up the Articles of
Association of a new IATA to succeed the old IATA.
The old IATA had its headquarters in Europe and had
confined its activities to Europe; the only outside
member was Pan American Airways. Now it was necessary promptly to form a new association with a
global outlook and worldwide membership. A fresh
start was psychologically and practically necessary.
"In April 1945, just a few months after the
completion of the Chicago Conference, the new
IATA had its organization meeting in Havana, Cuba.
Sixty-one airlines met at the Hotel Nacional to
consider and adopt, as amended, the Articles of
Association proposed by the Chicago drafting
Committee. With that, the new IATA was launched
(Legally, the Association was
on 19 April 1945.
unincorporated until its Canadian charter was
issued on 18 December 1945.)"
"International Air Transport Association: Some
Historical Notes", John C. Leslie Journal of InterAmerican Studies and World Affairs, Vol. XIII,
Nos. 3 & 4."
1/
(The drafting committee consisted of John C. Cooper,
Jr., as Chairman (Pan American Airways), Major
J. Ronald McCrindle (British Overseas Airways
Corporation), Per Norlin (Scandinavian Airlines
System), John Slater (American Export Airlines),
Henry Gorecki (LOT of Poland), Pedro Chapa (Cia.
Mexicana de Aviacion), Luis Machado (Compania
Cubana de Aviacion), and F. Flocon (France)).
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18
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time" seemed necessary if there was to be some reasonable chance
of persuading the CAB to approve the structure of IATA. Such
approval was required in order to give the United States members
of IATA immunity from the rigorous penalties of the United States
antitrust laws which, in general forbade agreements (or even
meetings or discussions) between competitors on such things as
rates, fares, capacity, and competitive conditions of service.
IATA had been promptly labeled as an international group of
operators who were banding together to fix rates and fares (technically "rates" apply to cargo and "fares" apply to passengers).
The association was somewhat unthoughtfully labeled as a "cartel."
A "cartel" is succinctly defined by Webster's New Collegiate (1974)
Dictionary as "a combination of independent commercial enterprises
IATA does not qualify because
designed to limit competition."
(1) the airlines are not independent (many are owned, and all are
subject to regulation, by their own governments); (2) many international airlines are instrumentalities of their owner-governments
more than they are commercial enterprises; (3) IATA cannot even
discuss competitive matters with United States airlines without
their government's approval to do so in advance; and (4) IATA is
not always seeking high fares. In fact, it has often happened
that it is the low cost --
not the cartel-like high cost --
carrier who, because of the unanimity rule, could and has held
out for its lower fare. If its owner-government prefers tourists
with their tourist spending money to higher air fares, its air
carrier merely holds out for the lower fare. Thus, whatever its
faults may be, its "cartel-implanted label" is a misnomer for
many reasons.
Apart from its rate and fare fixing functions, IATA also
does many other things which are beneficial. Its technical services, its traffic conferences, its collection and dissemination
of traffic statistics, its technical surveys, its active program
for the facilitation of travel, its clearinghouse connections and
numerous other services which it renders, are performed better
through the organized IATA group rather than would be the case
with each airline acting for itself.15/ In any case, however,
the matter of securing CAB approval would not be easy. This
approval did not come until the United States was faced with the
ultimate issue in Bermuda in February 1946. The reasons for the
government approval of IATA will, therefore, be set out in connection with the development of what was achieved at the Bermuda
Conference between the United States and the United Kingdom in
1946.
15/
IATA is now undergoing a considerable readjustment of its
organization. A carrier, e.g., may participate in many of
IATA's technical functions without participating in its rate
and fare functions.
-
VI.
19
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The United States-United Kingdom Bilateral Air Transport
Agreement (1946) --
The Bermuda Agreement
Following the 1944 Chicago Conference on International Civil
Aviation, the United States kept urging the United Kingdom to the
conference table to develop a bilateral air transport agreement.
The lack of such an agreement was holding up everything else in
the development of an international civil air route system. But
the British were in no hurry. They were not ready, they felt,
to open up the skies to the powerful United States operators.
In the background, a highly significant program of a different sort was steadily proceeding toward an explosive climax.
War-devastated Britain was literally gasping for its financial
breath of life. It had had one of the most severe experiences
in recorded history to finance its heroic war effort. During
the latter half of 1944 the proposal that the United States
should extend a $3,750,000,000 line of credit to Britain, good
up to December 31, 1951, became an issue that rocked the United
States from coast to coast and from border to border. This loan
was to be in addition to compromising to $650,000,000 the lendlease debt of Britain to the U.S. Interest was to be at the rate
of 2%; but a 5-year grace period made the effective rate 1.62%.16/
This loan was to be "subject to the approval of the legislatures
of both countries."17/ One will find in the Congressional Record
of this period a great many speeches, statements, reprinted editorials, articles, studies, and addresses on the matter. Most of
the substantive positions are negative. Reflecting a considerable
volume of sentiment was a Fort Wayne, Indiana News Sentinel editorial (on December 18, 1945), concerning this proposed loan
entitled "Stop This Thievery."18/ The Wall Street Journal published an article with a dateline of November 13, 1945, entitled
"Ballyhoo for Britain" which was calculated to inflame the nation
against the loan.19/
16/
Krock, "The Basic Reasons for the Credit to Britain",
New York Times, Dececember 7, 1945, 91 Cong. Rec.,
Part 13 p. 5471, December 11, 1945.
17/
Statement, dated December 6, 1945, issued by the
President of the United States and the Prime Minister
of Great Britain.91 Cong. Rec., Part 13, p. A 5342.,
December 7, 1945.
18/
91 Cong. Rec., Part 13, p. A 5649, December 18, 1945.
19/
91 Cong. Rec., Part 13, p. A 5649, December 18, 1945.
Some choice extracts from the article give the flavor
of many other sentiments of those times on this matter.
(Footnote 19/ continued on page 20)
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20
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On December 12, 1945, the very influential Congressman
Celler stated on the House floor (in confirmation, it would
seem, of the Wall Street Journal article's report that about
(Footnote 19/ continued from page 19)
"Washington.---The American public is expected to drop its
opposition to a loan for Britain between now
and the turn of the year.
"It won't happen by accident.
"Five top Government agencies are mobilizing
their opinion-manufacturing machinery for a
campaign which will start soon and which
officials say will be running at full tilt
by December, when Members of Congress will
be home listening to constituents. The payoff will be legislative action in January.
"Between now and then the pressure will pile
up. Some maneuvering will be in public view,
carefully timed. Speeches will be made by
Cabinet members, for instance. Some of it
will be a bit more obscure; the Government
aims to help in preparation of many a magazine
article, Sunday newspaper feature, and privately
sponsored radio programs plugging the loan.
Many 'Off-the-Record' Sessions
"A great deal of the activity will be entirely
behind the scenes. Plans are afoot for 'offthe-record' sessions in Washington and other
cities from coast to coast, in which officials
will indoctrinate businessmen, club-women,
labor and farm leaders, and representatives
of literally hundreds of miscellaneous organizations--all carefully chosen for maximum
influence on public thinking.
"Religious leaders, both ministers and laymen,
will be among those welcomed to Washington for
education, officials say, much as during the
campaign to sell the Bretton Woods monetary
plan.
(Footnote 19/ continued on page 21)
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21
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70% of the American people were then against "a large credit
for Britain.")
--
"Mr. Speaker. I heard with interest the remarks
of the gentleman from New York (Mr. Reed) and it
clearly indicates there has developed, and properly
so, an intense opposition to the so-called British
loan which amounts to $4,000,000,000, including
$650,000,000 for lend-lease in transit. .
Cong.
Rec., Part 9, p.
.
."
91
11927.
Among the earnest efforts made by U.S. political leaders to
support the loan, was that made by Under Secretary of State Dean
Acheson whose address on the subject was introduced in the
Congressional Record on February 21, 1946. After he spoke first
with warm approval of the Bretton Woods agreement for an international monetary fund and an International Bank for Reconstruction
and Development, all designed to restore world trade and the economic viability of nations, he then strongly supported the pending
loan to Britain. Among other strong positions taken, he stated:
. . .Or we had a chance of taking a narrow
viewpoint. We could have said, 'Well, we have
(Footnote 19/ continued from page 20)
"Meanwhile, representatives of Britain in the
United States have been specifically instructed
to keep quiet about the projected loan.
"The American strategy is all drawn up. It is
incorporated in a State Department document
bulking 100 pages or so which has been distributed to key officials in the Treasury
Department, Commerce Department, Federal Reserve
Board, and Agriculture Department.
Study Shows 70 Percent Oppose Credit
"This includes a section entitled 'Special
Report on Public Attitudes on Foreign Policy,'
based upon unpublicized governmental polls
of public opinion. This study, which also
includes analyses of press and radio comment,
is understood to show that about 70 percent
of the American people are presently against
a large credit for Britain."
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22
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done enough for the British. We sent them
$25,000,000,000 worth of lend-lease during
the war.~ We did all that and now we have our
own problems.' The result 'of that attitude
would have been that the British would have
been forced to adopt the only alternative
open to them--a desperate one which offered
no real hope to them or anyone else. It was
that alternative of trying to pull the Empire
closer and closer together, of saying, 'We
will make a contract to sell to Australia and
they will buy from England. Or Australia will
sell to South Africa and buy from England.'
Deals within the Empire: That was the alternative. It was an alternative which would
mean a lowered standard of living throughout
the world; it would mean lowered markets for
the United States. For the prosperity of
this country can no more continue in the face
of a descending and impoverished world than
it could continue in the period of the thirties.
Those were the alternatives and, faced
that situation, some of the criticisms
I hear seem to me to be uninformed and
frivolous." 92 Cong. Rec., Part 9, p.
February 21, 1946.
with
which
almost
A 977,
It was not until July 17, 1946 that the Chancellor of the
Exchequer of the United Kingdom announced (July 17, 1946) "The
American Congress has now approved the loan. . .
.We have a common
interest in reviving trade throughout the world and in providing
good standards of living for men and women everywhere."20/ However, at the end of 1945, debate in the United States over whether
or not the loan should be approved was at white heat. The outcome
of the issue was in doubt.
With the war just recently at an end, with international
civil air transport stalled until we could persuade the British
to negotiate with us, with ever increasing embarrassment on the
British side because it looked as if they were holding numerous
nations back in their civil air transport development because
the British were not ready, and with the very important objective
of securing the all important $3,750,000,000 loan (plus the
$650,000,000 lend-lease compromise) within reach if all major
obstacles were removed, the British suddenly switched tactics.
20/
Extension of Remarks by Congresswoman Frances P. Bolton,
July 17, 1946.
92 Cong. Rec., Part 12, p.A4211, July 17,
1946.
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23
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They issued an invitation early in January 1946 to the United
States to meet in uncharacteristic haste in about 10 days in
Bermuda for the purpose of negotiating two agreements. The
first concerned the commercial use of 4 out of 7 ocean bases
in the Caribbean and in the North Atlantic (something the United
States wanted very much but which had theretofore been used by
The second was
the United States for military purposes only).
the long-desired new bilateral air transport agreement. The
invitation was accepted at once.
The agreement on the bases was developed first with comparative ease. Then came the more difficult air transport agreement
negotiations. The issues in the air transport negotiations of
most significance were:
(1) The British wanted government control of such things as
the capacity which each airline would operate and of the rates and
fares charged, with such controls spelled out in advance of operations, that is, predetermination of those matters. They were most
apprehensive that the U.S. operators would flood the market and
put in very low rates and fares. The United States, on the contrary, was vigorously opposed to predetermination of those issues.
Furthermore, the Congress had given no power to the CAB or to any
other agency or Department to regulate international rates, fares,
equipment, or schedules. Hence, the CAB could not agree to predetermination of those issues because that would be contrary to
the intent of Congress and because the CAB had no power, in any
evenL, to do so.
(2) The United States wanted the unrestricted right to take
on traffic in a foreign country and carry it on'to another foreign
country on its long routes ("fill-up" traffic), whereas the
British wanted to severely restrict such a right and to require
that the, capacity offered on any route be related directly to
that required to properly service traffic from and to the homeland of the operating carrier.
Here, again, it was the fear that the United States operators
would flood the world's air markets with massive capacity at very
low rates and fares which made the opposition so tenacious in
their restrictive attitudes.
These issues were fought over with vigor and for a long time.
The resulting agreement contained ambiguities; but the major objective was not to draft a model document, but, rather, to reach an
accommodation which would break the "log jam'- and get international
air transport into the air. The Bermuda Agreement did that. Both
countries in a joint statement released September 19, 1946, agreed
that the Bermuda Agreement in its essential characteristics provided a reliable basis for the orderly developmenc and expansion
-
24
-
of international air transport.21/ It lasted over 30 years and
served as a model around the world, generally speaking, for 65
bilateral agreements. That seems to-speak well for the achievement of the "metamorphosis" mentioned at the beginning of this
paper. In any case, it worked.
The largest issue, that of predetermination, was ultimately
resolved in this manner. The British were adamant in their refusal
to let rates and fares go uncontrolled; but, since the CAB had no
direct power over such matters, the United Kingdom agreed to relax
their insistence upon predetermination of the capacity to be
operated if the U.S. would approve letting the operating carriers
fix rates and fares, subject to the veto thereof by the home
government of each carrier. This meant approval by the CAB of
the organization and structure of IATA, so that carriers could
meet, discuss, and fix rates and fares, subject to veto by the
home governments, without violating the United States antitrust
laws. Such approval came reluctantly from some members of the
CAB. But, eventually the organization and structure of IATA was
approved in Bermuda for one year (later extended indefinitely)
where the members of the CAB were present. One member rendered
an extensive dissent, although a question may linger as to
whether or not he would have done so had his vote been essential
for approval. It seems accurate to say that without such
approval, the securing of any sort of adequate Bermuda Agreement
would have been in great jeopardy.22/
The British also relaxed on forbidding the carriage of
fill-up foreign traffic in exchange for a broad statement of
principles to the effect that the capacity provided on a long
route would be geared basically to that needed to accommodate
the home traffic of the carrier operating the route, after
taking into account the need for fill-up traffic in developing
long routes and the effect of the operations on local carriers
in the region through which the long route passed.
21/
Department of State Bulletin of September 29, 1946, p. 577.
Walstrom, op.
22/
cit.
The CAB also agreed to seek legislation from Congress
authorizing the CAB to fix international rates and fares.
(This it unsuccessfully did for many years. Only recently
has some power in this area been given to the CAB, but the
exercise thereof is in effect subject to Presidential veto.)
There were also elaborate and complicated inter-governmental
conferences agreed to in case IATA could not agree (unanimously) on rates and fares.
lolilliblililil,
I.lijIIniild
-
25
-
The agreement on the exchange of routes is reflected in a map
appearing at the end of this paper as Attachment 2. At that
time the United Kingdom controlled 11 strategic points on the
international routes desired by the United States. Because of
the limited range of aircraft then available, these 11 points
were very important. As will be apparent, the United States
obtained the basic route authority it desired from the United
Kingdom. Other route authority called for by Attachment 1
did not involve the United Kingdom and is therefore not shown on this map.
Although the foregoing summary statement of solutions
reached in order to achieve an agreement may be oversimplified,
nevertheless the Bermuda Agreement illustrates how two tenaciously
held opposing views can be accommodated. The art of successful
international dealings is best served when closed doors are
opened and "irreconcilable" positions are made tolerable in
some mutual accommodation. In any event, the steady and rapid
development of networks of air transport route systems around the
world, heavily patronized by the public, speak well for the workability of the agreement in action.
VII. EPILOGUE
Mankind is, in some respects, like a missile with multiple
missions. Some have a good "guidance system" (conscience); some
do not -- are not even aware of its lack. Hitler used air power
to blitz his way craftily to international power and treachery.
By way of contrast, the victorious WW II allies used air power
in its broadest sense to advance international commerce, culture,
education, and the general welfare. The effects upon our civilization have been profound. Technological developments in other
fields have made their impacts, too, but none surpass air power
in its penetrating changes in modern life and thinking.
Unlike the boundaries of the sea by the shorelines, the
"ocean of air" laps at the borders of every state, city, town,
and home throughout the World. Ocean barriers have become relatively meaningless. We are each other's neighbor, wherever on
earth or sea we may be. We are not yet fully-aware of the
implications of this profound change in our-relationships.
The Chicago Conference (which organized the World for the
rapid development of the civil part of air power internationally) contributed much to the success of the metamorphosis of
international air transport following WW II; and to changing our
World in most important ways. But we must wait for future historians to evaluate the impact of such changes. I hope and
believe that such evaluation will be decidedly positive.
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